A mortgage broker has called on the government to review past SMSF lending practices as part of the Royal Commission into banking, superannuation and financial services.
Speaking to The Adviser’s sister publication, SMSF Adviser, Thrive Investment Finance owner Samantha Bright said that SMSF lending is now the most heavily scrutinised and regulated type of lending, and that there are some dodgy practices that occurred in the past that could be cleaned up by the Royal Commission.
Ms Bright believes that it would be worthwhile for the government to look at what practices were occurring before lending conditions were tightened and further regulations were brought in.
“There were a few too many people on that gravy train before things got tidied up around SMSF lending, and by that, I mean property spruikers and people suggesting that customers open a fund just for property investment,” Mr Bright said.
“There were a lot of people at that trough. There were a lot of people getting paid at that time for doing things that were totally unprofessional.”
ASIC has knocked on a lot of planners’ doors about having one-size-fits-all advice, and while some of it did come from that area, she said, a lot of it came from “brokers doing loans for anyone that came across their desk”, some of which were off the plan and from property spruikers.
“Those practices shouldn’t have been allowed, and if the Royal Commission is able to stop that, then that’s awesome,” Mr Bright said.
The Thrive owner added that she generally welcomed the Royal Commission and the inclusion of brokers.
“In every industry, we know there is an element of cowboys, and if this is what it takes to clean that up, then I welcome it, because there’s too many people doing the right thing to have people tarnish what the rest of us do.”
[Related: Brokers to be included in Royal Commission]
James Mitchell has over eight years’ experience as a financial reporter and is the editor of Wealth and Wellness at Momentum Media.
He has a sound pedigree to cover the business of mortgages and the converging financial services sector having reported for leading finance titles InvestorDaily, InvestorWeekly, Accountants Daily, ifa, Mortgage Business, Residential Property Manager, Real Estate Business, SMSF Adviser, Smart Property Investment, and The Adviser.
He has also been published in The Daily Telegraph and contributed online to FST Media and Mergermarket, part of the Financial Times Group.
James holds a BA (Hons) in English Literature and an MA in Journalism.
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